3R Petroleum Acquisition of the Potiguar Cluster

3R PETROLEUM ÓLEO E GÁS S.A. (“3R” or “Company”) (B3: RRRP3), communicates to its shareholders, investors and the market in general that Petróleo Brasileiro S.A. (“Petrobras”) sent a notification to the Company informing that its Board of Directors approved, on today’s date, the sale to 3R Potiguar S.A. (“3R Potiguar” ), a subsidiary of the Company, of its interest (100%) in the Potiguar Cluster, located in the Potiguar Basin, in the State of Rio Grande do Norte, which is the last pending stage for the execution of the respective purchase and sale agreement for the said asset, estimated to occur on January 31, 2022.

The agreement provides for the assignment of concession contracts for a set of 22 fields in production and the transfer of the entire infrastructure and pipeline systems that support the operation, in addition to the Industrial Asset of Guamaré (“IAG”), which includes processing units of natural gas (UPGNs), the Clara Camarão refinery and the Guamaré Waterway Terminal (Terminal for private use), with extensive storage capacity and systems that allow the export and import of oil and derivatives.

The total value of the transaction is US$ 1.38 billion, of which (i) US$ 110 million is paid upon execution of the agreement for the acquisition of said asset; (ii) US$ 1.04 billion to be paid on the closing date of the transaction; and (iii) US$ 235 million in 4 annual installments of US$ 58.75 million, starting in March 2024, ending in March 2027. The amounts do not consider adjustments and the closing of the transaction is subject to compliance with precedent conditions, such as approval by the National Agency for Petroleum, Natural Gas and Biofuels (ANP).

Additionally, the transaction includes the transfer of the cash generation related to the production and sale of oil and gas from the 22 fields in production mentioned above (upstream) to 3R Potiguar, as of the Effective Date (i.e., July 1, 2022).

 About Potiguar Cluster

The Potiguar Cluster comprises three concession sub-cluster: (i) Canto do Amaro, which comprises twelve onshore production concessions; (ii) Alto do Rodrigues, which comprises seven onshore production concessions; and (iii) Ubarana, which comprises three concessions located in shallow water, between 10 and 22 km off the coast of the municipality of Guamaré. The Cluster’s logistics are optimized, as all oil and gas production is transported through pipelines to the processing facilities located at IAG.

In 2021, the Potiguar Cluster concessions recorded an average production of 20.6 thousand barrels of oil/day and 58.1 thousand m³/day of gas. According to ANP data, the estimated original volume of oil and gas in place is approximately 3.92 billion barrels of oil equivalent, with a density between 16 and 39 °API and a low level of contaminants.

The three sub-clusters have a complete infrastructure to support its operations, among which the following stand out: (i) collection, compression, and water injection stations; (ii) power substations; (iii) steam generation system with pipelines linked to generation and injection stations; (iv) offshore platforms connected to IAG’s facilities by pipelines; (v) onshore and offshore production flow system; and (vi) operational bases, laboratories for analysis, maintenance sheds and stock of materials.

Additionally, the IAG brings together all the necessary infrastructure for processing, treatment, refining, logistics and storage of oil and gas from all onshore and offshore fields in the State of Rio Grande do Norte, including those already acquired by 3R in the region (Macau, Areia Branca and Pescada Clusters) and the fields operated by other companies in the sector.

Among the structures that make up the IAG, the following stand out:

• Oil and water treatment stations with a total capacity of over 750,000 barrels of fluids per day;
• Tanking with storage capacity of more than 1.8 million barrels of oil and derivatives, being able to store the oil production of the Rio Grande do Norte fields for more than 20 days;
• Clara Camarão Refinery, with an installed refining capacity of 39,600 barrels of oil per day, which serves the gasoline, diesel, bunker and aviation kerosene markets in Rio Grande do Norte, Ceará and Paraíba, with the potential to expand operating in these markets and reaching other border states;
• Natural gas processing units (UPGNs) with a capacity of 1.8 million m³ of gas per day, in addition to compressors for exporting gas that are connected to the gas transport networks in the Northeast and Southeast of the country;
• Guamaré Waterway Terminal, with high capacity for export, import and cabotage of oil and derivatives.

3R Portfolio Management and Strategy

The acquisition of the Potiguar Cluster represents a milestone in the history and construction of 3R’s portfolio. The asset substantially expands the scale of production and the capacity to replace and increase reserves in the coming years, positioning the Company as one of the main players in the oil and gas industry in Latin America.

As an example, if the Potiguar Cluster were part of 3R’s portfolio in the period between January and November 2021, the Company’s total production would amount to more than 45,000 barrels of oil equivalent per day, with the Potiguar Cluster responsible for more than 47% of said production.

Also, according to the map of the Potiguar Basin presented below, the Cluster is fully integrated with other assets acquired by the Company in the region, which enables an optimized operation, taking advantage of synergies, gains in scale with suppliers and service providers, as well as a reduction in of logistical costs.

The Potiguar Cluster will provide commercial flexibility for all 3R production from concessions located in Rio Grande do Norte: (i) for oil, the Company will have independent access to the international market, being able to export it via the Guamaré Waterway Terminal and /or refine it at the Clara Camarão Refinery, supplying local distributors; and (ii) for gas, access to a new portfolio of customers located on the Brazilian coast, with its own processing and compression capacity for volumes to be potentially sold.

With the Potiguar Cluster integrated into its portfolio, 3R will have approximately 77% of its production anchored in onshore/near shore assets (assets in shallow waters and connected by pipelines that flow production to onshore facilities), with competitive lifting costs and greater flexibility for the implementation of investment projects (CAPEX) when compared to a mostly offshore portfolio.

The transaction reinforces the Company’s investment thesis, by anchoring its growth in projects to revitalize mature oil and gas fields, with certified reserves, led by a multicultural management team with consolidated experience in several Latin American countries.

Finally, 3R reinforces its commitment to keep its investors and the market in general duly informed, in line with the best corporate governance practices and in strict compliance with current legislation.